Countrywide protected fraudsters, silenced whistleblowers


Eileen Foster

In the summer of 2007, a team of corporate investigators sifted through mounds of paper pulled from shred bins at Countrywide Financial Corp. mortgage shops in and around Boston.

By intercepting the documents before they were sliced by the shredder, the investigators were able to uncover what they believed was evidence that branch employees had used scissors, tape and Wite-Out to create fake bank statements, inflated property appraisals and other phony paperwork. Inside the heaps of paper, for example, they found mock-ups that indicated to investigators that workers had, as a matter of routine, literally cut and pasted the address for one home onto an appraisal for a completely different piece of property.

Eileen Foster, the company’s new fraud investigations chief, had seen a lot of slippery behavior in her two-plus decades in the banking business. But she’d never seen anything like this. “You’re looking at it and you’re going, Oh my God, how did it get to this point?” Foster recalls. “How do you get people to go to work every day and do these things and think it’s okay..?”

One executive, Foster says, sent an email to dozens of workers in the Boston region, warning them the fraud unit was on the case and not to put anything in their emails or instant messages that might be used against them…Her team was not allowed to interview a senior manager who oversaw the branches. Instead, she says, Countrywide’s Employee Relations Department did the interview and then let the manager’s boss vet the transcript before it was provided to Foster and the fraud unit.

In the end, dozens of employees were let go and six branches were shut down. But Foster worried some of the worst actors had escaped unscathed. She suspected, she says, that something wasn’t right with Countrywide’s culture — and that it was going to be rough going for her as she and her team dug into the methods used by Countrywide’s sales machine.

By early 2008, she claims, she’d concluded that many in Countrywide’s chain of command were working to cover up massive fraud within the company — outing and then firing whistleblowers who tried to report forgery and other misconduct. People who spoke up, she says, were “taken out.”

By the fall of 2008, she was out of a job too. Countrywide’s new owner, Bank of America Corp., told her it was firing her for “unprofessional conduct.”

Foster began a three-year battle to clear her name and establish that she and other employees had been punished for doing the right thing. Last week, the U.S. Department of Labor ruled that Bank of America had illegally fired her as payback for exposing fraud and retaliation against whistleblowers. It ordered the bank to reinstate her and pay her some $930,000.

Bank of America denies Foster’s allegations and stands behind its decision to fire her. Foster sees the ruling as a vindication of her decision to keep fighting.

I don’t let people bully me, intimidate me and coerce me,” Foster told iWatch News during a series of interviews. “And it’s just not right that people don’t know what happened here and how it happened.”

This is the intro to Part 1 of Eileen Foster’s tribulations as whistleblower on Countrywide Financial. The single company that can assume credit for the Great Recession over any other. Add to it the continued attempts by present owners Bank of America to paper over the crimes committed, fraud perpetrated.

Part 2 appears today. Just click the link above and follow the slime trail.

7 thoughts on “Countrywide protected fraudsters, silenced whistleblowers

  1. god says:

    Countrywide set the standard for sleazy, fraudulent mortgages. Folks involved in so many of those are upside-down on payments and valuations because they shouldn’t have qualified in the first place.

  2. moss says:

    The lack of standards and oversight are even worse at the level of local hustler. Many states like New Mexico don’t even have licensing requirements for storefront mortgage lenders. They’re often the same scumbags as payday lenders.

  3. E Trams says:

    Whistleblowers are commonly silenced in New Mexico and the United States. Some whistleblowers in New Mexico look like their pleas, to the FBI in regard to former Secretary of State Mary Herrera, are being swept under the carpet. And as far as NM Attorney General Gary King goes, those whistlelbowers would have already been vacuumed up. It is pathetic to see justice loving Patriots abused in such a manner but that’s American politics for you.

    I think the heads of Countrywide belong in jail.

      • E Trams says:

        Yep. And just like criminals who repititiously commit crimes because they are never prosecuted or sent to jail (expecially for white collar crimes) his life has not really been altered like all of his victims. (the entire US citizenry?)

        There should not be any difference in punishment for white collar criminals and a common thug. But, money talks….to judges, lawyers, media consultants, extortionists, corrupt law enforcement etc.

        One element we should do away with is US Attorneys, District Attorneys, and States Attorney Generals who fashion their work upon what will get them elected and what they perceive as political gain.

        It is no wonder the ordinary citizen is so angry, the haters so fueled, and the victims so discouraged.

        • E Trams says:

          Oh and by the way, New Mexico Attorney General Gary King’s cousin, Rhonda King, just declared she is bowing out and not seeking reelection to the State Legislature. She is married to a Montoya who is Chief of Staff of the Public Regulation Commission which is riddled with scandal and in the news frequently in regard to a criminal who seems to keep escaping long term jail sentencing of which Gary King is also involved. That incident involves drugs and theft. These Kings are also related to a former Governor, Bruce King of New Mexico.

          A lot of people remain above the law in New Mexico.

          I wonder if God knows what is really going on in the world of Rhonda King. (it is pretty clear to the common man who is inundated with stories of unprosecuted political criminal activity in New Mexico) Will there be an indictments of Montoya or the Kings? Will the one King that can get indictments issue any?

          Maybe the US Justice Department, sans their rep in New Mexico, should get involved. After all, how many victims are enough victims?

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